Doing business in Spain

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Spain is a country in southwestern Europe, bordering France, Portugal, Andorra, Gibraltar and Morocco (Ceuta and Melilla). The country has a population of just over 47 million, and the official language is Castilian Spanish. There are also Catalan-, Basque- and Galician- speaking minorities in the country.

Most of the population is Roman Catholic, yet for many—and especially for those born after 1950—this has little meaning beyond being baptised, married, and buried within the church.

Spain had a powerful world empire during the 16th and 17th centuries. However subsequent failure to embrace the industrial revolutions caused Spain to fall behind in economic and political power. Spain remained neutral in WW2 but suffered through a devastating civil war (1936–1939). A transition to democracy following the death of Dictator Francisco Franco in 1975 and rapid economic modernisation gave Spain a dynamic economy. However, from 2008 to 2012, unemployment levels grew to almost 25% and in 2011, the new leadership announced harsh austerity measures. The Covid-19 pandemic also hit Spain hard with job losses affecting young and temporary workers. Fiscal support has been significant, and the recovery is gathering pace. With a GDP of $1.4 billion, Spain is the 6th economy of the EU, and 15th in the world.

In business, Spaniards are welcoming and visitors will be asked about their impressions of the country. Speak warmly of Spanish culture, history, cuisine, sporting achievements, writers or historical sites you have visited.

Spain contains several different historical provinces and localities that each have their own distinct identity, cultural practices and traditions. For example, some regions have their own language, cuisine and literature that have developed through history. In appreciation of these provincial identities, Spain is split into 17 different regions, known as autonomous communities (comunidades autonomas). There is sensitivity surrounding the topic of local nationalism which can be seen in the Catalonia independence movement.

More and more Spanish companies have received foreign investment and embraced modern global management techniques. Consequently, the new generation of managers are less hierarchical and more team-oriented than the ‘old guard’. Building lasting and trusting personal relationships remains very important to Spaniards. The Spanish tend to distrust people who appear unwilling to spend the time or whose motives for relationship-building are unclear.

Spanish employees look to foreign managers to be openminded and responsive to input, as they will want you to understand the local situation and preferred ways of doing things in Spain.

Respect depends primarily on rank and status. Admired personal traits include confidence, poise, modesty and sociability. A smart appearance is important too. Whilst they have a good sense of humour, the Spanish are a proud people and don’t react well to irony, mockery or teasing.

Many organisations have now adopted flatter organisational structures and have gone through significant change. Decision-making is not necessarily hierarchical but disseminated and conducted in a more consultative way. That said, it is expected that the person in charge will make decisions. The figure of the company leader is conceived as strong, and in many cases they do not show “doubt” or make concessions, as their main function is to lead and to give direction. So much so that Spanish workers value interpersonal or emotional skills such as resilience or direction in a boss much more than factual experience or knowledge.

There is concern generally about risk and change – particularly when a decision has already been made or in ambiguous situations. In a recent survey 75% of Spanish young people expressed their desire to work in the civil service (ie. perceived as a job for life, fewer concerns about the future). In contrast, in the USA only 17% of young people would like it.

Working days often start early in the morning and finish late in the evening, leaving little room for personal life, particularly in cities such as Madrid and Barcelona, where long commutes are part of the daily routine. On average, the peak time for people to eat lunch in Spain is 2.30pm, and the most popular time to have dinner is 9.20pm. The long lunch break is becoming less common, particularly among younger workers, more used to quick lunches brought to work, where kitchens and lunch spaces are now features of office life.

Nevertheless, meetings and decisions are driven by a midday gap that is sometimes filled with the proverbial two-hours-ormore working lunch, especially for people in managerial roles. Even without an extended break, there is a natural push towards a working day well beyond the typical 9-to-5 you see in other countries. In fact, full-time employees work more than 40 hours a week, above the European average.

Communication in Spain is rather indirect. Spaniards prefer to be careful about what they say and how they say it. People may not get straight to the point when trying to get a message across. A co-worker who has an issue with you is more likely to discuss the issue with other co-workers and attempt to gain their support. Nevertheless, they are usually grateful if you are direct and raise the issue in a non-conflict manner. Confronting the person in a way that demonstrates mutual self-respect may often be greeted by a denial that any issue exists, but persistence will result in the issue being discussed. Confront people privately and in confidence and look for subtle messages to understand what may be communicated ‘between the lines’. At meetings, it’s common to start talking about personal and family issues, and therefore the gathering will last longer. If you come from another country you may feel that you are “wasting your time” by not addressing the topic of the meeting at all times. But that is the way to create the warm atmosphere necessary to continue in the country.

In addition, interruptions are common, and speaking in turn is not always respected. But that is completely normal, and it can even mean that the other person is interested in what you are saying. The main focus is usually not much brainstorming, but rather the communication by a superior of decisions that has already been made. Because the perception of time is different, meetings start and end later than usual or than what planned, especially since punctuality is not a prevalent rule.

Decision-making can sometimes take a long time and requires patience. Attempts to rush or put pressure on the process could be counterproductive. However, a lot depends on the situation as at times, decisions are made straight away, such as a customer placing an order, and sometimes more time is required before a decision is reached. This is complex and is dependent on many circumstances.

Spaniards expect long-term commitments from their business partners and focus on long-term benefits. While business proposals should demonstrate the benefits to both parties, neither side should take attempts to win competitive advantages negatively. It is important to remain non-confrontational throughout a negotiating exchange. Ultimately, Spaniards prefer a win-win approach. You will earn your counterparts’ respect by maintaining a positive, persistent attitude.

While you might think that kissing each other on both cheeks is a standard greeting in Spain, it’s actually only a practice among people that know each other well. A more appropriate greeting in a business setting is a handshake. When you go into a room, make sure you greet everyone present, making eye contact as you do so. Other considerations for when you meet somebody for the first time: Spanish has both a formal (usted) and informal (tú) you. The etiquette of when to use each is complicated and depends on the business sector. A good tip is to listen out for how the person you are speaking to addresses you and use the same form. If in doubt, use usted. Some people have two first names (e.g. Juan Carlos or Ana María): you should call them by both.